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Case 1:16-cv-12480-GAO

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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

CAFFEINATE LABS, INC.,

Plaintiff,

v.

VANTE INC., a New York corporation, and ALEXANDER SHLAFERMAN, an individual,

Defendants.

Civil Action No.: 1:16-cv-12480-GAO

DEFENDANTS’ RESPONSE TO PLAINTIFF’S MOTION TO DISMISS PLAINTIFF’S DESIGN PATENT INFRINGEMENT CLAIM

I. INTRODUCTION

Plaintiff seeks to avoid sanctions by voluntarily dismissing its design patent claim and

claiming sanctions are now moot. This is incorrect. Lured by the lucrative prospect of the design-

patent-only “total profits” remedy of 35 USC 289, made famous in the recent Apple v. Samsung

case before the U.S. Supreme Court, Plaintiff chose to assert a frivolous design patent claim in

this case. Despite Defendants’ numerous requests that Plaintiff withdraw this frivolous claim,

Defendants pressed on undeterred, forcing Defendants to devote time and incur legal expenses

defending a meritless claim. While Defendants do not oppose withdrawal of the design patent

claim with prejudice, Defendants respectfully request that this Court also impose sanctions for

Plaintiff’s continued pursuit of this frivolous claim See Ex. 3 (Defendants’ Motion for Sanctions

served on Plaintiff).

II. BACKGROUND

Plaintiff has finally acknowledged the frivolity of its design patent claim against

Defendants, and now seeks to voluntarily dismiss it, alleging that dismissal is in the interest of

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judicial economy. But Plaintiff’s pursuit of this claim since the inception of this suit has flown in

the face of judicial economy. Plaintiff’s dismissal has only come after:

Defendants’ counsel urged Plaintiff’s counsel to withdraw the frivolous design

claim by telephone as early as December 21, 2016, right after the original

complaint was filed. Defendants reiterated this request in a January 30, 2017 letter,

and informed Plaintiff that given the frivolity of the clam they would seek

sanctions if the claim was not withdrawn. See Ex. 1.

Rather than withdraw the claim, Plaintiff doubled down by amending its complaint

on February 9, 2017 to add more “facts” to its claim. (ECF 15). But Plaintiff’s First

Amended Complaint merely adds irrelevant details and does not alter the plain

dissimilarity of the design patent and accused product. See Ex. 2 (a word document

showing changes from the Original Complaint to the First Amended Complaint in

redline.).

Defendants were thus forced to file a motion to dismiss the design patent claim on

March 2, 2017 (see ECF 20), which Plaintiff chose to oppose on March 16, 2017

(see ECF 26). Given Plaintiff’s continued refusal to withdraw the claim, despite

numerous opportunities to do so, Defendants served a motion for sanctions under,

inter alia, Rule 11, or alternatively, under 28 U.S.C. § 1927 and/or the Court’s

inherent authority on Plaintiff on March 17, 2017. See Ex. 3.

Despite Plaintiff’s counsel’s objection at the status hearing on March 20, 2017,

Defendants were allowed to reply to Plaintiff’s Opposition to the Motion to

Dismiss. See Ex. 4.

Defendants filed the reply on March 30, 2017. (ECF 31).

Plaintiff subsequently received permission to file a surreply, which Defendants did

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not oppose, due April 10, 2017. But instead of filing the surreply, Plaintiff finally

decided, allegedly in the interest of judicial economy, to file the motion to dismiss

that this response addresses.

Accordingly, when Defendants received Plaintiff’s offer yesterday to dismiss the design

patent claim with prejudice, it came only after an arduous legal trek. This is an exceptional case

that would not have been exceptional had Plaintiff simply withdrew its design patent claim, as

Defendants have been urging since the complaint was filed. But Plaintiff insisted on continuing

to pursue this frivolous claim, causing Defendant to incur unwarranted legal expenses. As such,

Defendants would not agree to Plaintiff’s Motion to Dismiss without appropriate sanctions.

III.

ARGUMENT

Plaintiff’s withdrawal at this time does not render applicable sanctions moot. First, despite

Plaintiff’s assertion, the 21-day Rule 11 safe harbor ended on Friday, April 7, and Plaintiff did

not cure by then. Plaintiff cites a single apposite case, Sneade v Rojas, for alleging that Plaintiff’s

service of its Rule 11 Motion was untimely on March 17. But that case dealt with the filing of a

summary judgment opposition with the court, not email service of a Rule 11 motion. And

tellingly, the court did not strike the filing despite its apparent late filing.

Plaintiff further argues that Rule 5(a)(2)(E) states that electronic service is “not effective if

the serving party learns that did not reach the party to be served.” But Plaintiff does not allege (i)

it was not reached; or (ii) Defendant knew Plaintiff had not been reached. To the contrary, Rule

5(a)(2)(E) explicitly states “service is complete on transmission.” Defendant delivered the

Motion by email on March 17, and thus service was complete on that date. Plaintiff’s argument

that counsel not checking her email until the next day negates this rule defies logic. Plaintiff’s

safe harbor therefore ended on April 7, 2017.

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Second, as laid out in Defendant’s Motion (Ex. 3), sanctions are alternatively appropriate

under 28 U.S.C. § 1927 and/or the Court’s inherent authority, neither of which requires the 21-

day safe harbor of Rule 11. Plaintiff’s quibbles regarding the date of service do not change that

its

continued

pursuit

of

a

frivolous

claim

unreasonably

and

vexatiously

multiplied

the

proceedings in this case. As such, sanctions are independently warranted in this case under 28

U.S.C. §

1927

and/or the

Court’s

inherent

authority,

including

payment

of Defendants’

attorneys’ fees associated with the defense of the frivolous design claim.

Third, Plaintiff’s decision to now withdraw its design claim does not cure the prejudice

already done to Defendants. Defendant Vante is a small business run by a 23-year old

entrepreneur, and Plaintiff’s intransigence has unfoundedly cost Defendants many thousands of

dollars in legal fees, not to mention diverting his time and money away from continuing the

develop his business. Dismissing this claim now does not cure Defendants’ harm, and Plaintiff’s

actions therefore warrant sanctions including attorneys’ fees.

IV.

CONCLUSION

Plaintiff’s design claim was frivolous at the inception of this suit yet Plaintiff continued

to pursue it despite Defendants’ urgings that Plaintiff withdraw the claim. Plaintiff’s actions have

caused Defendants to incur expenses as a direct result of Plaintiff’s prejudicial actions.

Defendants respectfully request that the Court impose sanctions on Plaintiff under Rule 11, or

alternatively, under 28 U.S.C. § 1927 and/or the Court’s inherent authority and, including

payment of Defendants’ attorneys’ fees associated with the defense of the design patent claim.

Date: April 11, 2017

Respectfully submitted,

VANTE, INC. and ALEXANDER SHLAFERMAN

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By:

/s/ Richard S. Stockton

Ernest V. Linek (BBO #543985) Attorney for Defendants BANNER & WITCOFF, LTD. 28 State Street – Suite 1800 Boston, MA 02109 Telephone: (617) 720-9600 Facsimile: (617) 720-9601 E-mail: elinek@bannerwitcoff.com

Richard S. Stockton (pro hac vice) Attorney for Defendants BANNER & WITCOFF, LTD. Ten South Wacker Drive, Suite 3000 Chicago, Illinois 60606-7407 Telephone: (312) 463-5000 Facsimile: (312) 463-5001 E-mail: rstockton@bannerwitcoff.com

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CERTIFICATE OF SERVICE

I hereby certify that the foregoing document is being filed through the Court’s electronic

filing system on April 11, 2017, which serves counsel for other parties who are registered

participants as identified on the Notice of Electronic Filing (NEF).

/s/Richard S. Stockton Richard S. Stockton

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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

CAFFEINATE LABS, INC.,

Plaintiff,

v.

VANTE INC., a New York corporation, and ALEXANDER SHLAFERMAN, an individual,

Defendants.

Civil Action No.: 1:16-cv-12480-GAO

DECLARATION OF RICHARD S. STOCKTON IN SUPPORT OF DEFENDANTS’ RESPONSE TO PLAINTIFF’S MOTION TO DISMISS PLAINTIFF’S DESIGN PATENT INFRINGEMENT CLAIM

I, Richard S. Stockton, declare as follows:

1. I am an attorney with the law firm of Banner & Witcoff, Ltd., counsel for

Defendants, Vante, Inc. and Alexander Schlaferman, in the above-captioned lawsuit.

2. I submit this Declaration to authenticate and to provide to the Court certain

Documents Cited to and referenced in the accompanying Defendants’ Response to Plaintiff’s

Motion to Dismiss Plaintiff’s Design Patent Infringement Claim.

3. Attached as Exhibit A is a true and correct copy of correspondence sent from

Richard Stockton, counsel for Defendants, to Anne-Marie Dinius and Jonathan Braverman,

counsel for Plaintiff, on January 30, 2017.

4. Attached as Exhibit B is a true and correct copy of a word document showing a

comparison of the Original Complaint (ECF 1) to the First Amended Complaint (ECF 15) with

changes shown in redline.

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5. Attached as Exhibit C is a true and correct copy of Defendants’ Motion for

Sanctions served on Plaintiff on March 17, 2017, including the related Declaration of Richard

Stockton, counsel for Defendants, a proposed order, and exhibits 1-6 attached to Defendants’

Motion for Sanctions.

6. Attached as Exhibit D is a true and correct copy of a transcript of the Scheduling

Conference held on March 20, 2017 in the above captioned case.

I declare under penalty of perjury that the foregoing is true and correct.

Date: April 11, 2017

Respectfully submitted,

VANTE, INC. and ALEXANDER SHLAFERMAN

By:

/s/ Richard S. Stockton

Ernest V. Linek (BBO #543985) Attorney for Defendants BANNER & WITCOFF, LTD. 28 State Street – Suite 1800 Boston, MA 02109 Telephone: (617) 720-9600 Facsimile: (617) 720-9601 E-mail: elinek@bannerwitcoff.com

Richard S. Stockton (pro hac vice) Attorney for Defendants BANNER & WITCOFF, LTD. Ten South Wacker Drive, Suite 3000 Chicago, Illinois 60606-7407 Telephone: (312) 463-5000 Facsimile: (312) 463-5001 E-mail: rstockton@bannerwitcoff.com

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EXHIBIT A

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1:16-cv-12480-GAO Document 35-2 Filed 04/11/17 Page 2 of 6 January 30, 2017 Richard S. Stockton

January 30, 2017

Richard S. Stockton rstockton@bannerwitcoff.com

VIA EMAIL (amdinius@amdiniuslaw.com; jonathanb@bbb-lawfirm.com)

Ms. Anne-Marie Dinius AMDinius Law

101 Great Road, #119

Bedford, MA 01730

Mr. Jonathan Braverman Baker, Braverman & Barbadoro, P.C.

300 Crown Colony Drive Ste. 500

Quincy, MA 02169-9126

Re:

Caffeinate Labs, Inc. v. Vante Inc. et al., (Case No.: 1:16-cv-12480-GAO)

Dear Ms. Dinius and Mr. Braverman:

As discussed in December with Ms. Dinius, we are writing to demand that Caffeinate Labs, Inc. (“Caffeinate”) amend its complaint to withdraw the claim against Vante Inc. and Alexander Shalferman (collectively, “Vante”) relating to infringement of U.S. Pat. No. D707,091 (the “D’091 Patent”), including but not limited to withdrawing the allegations in paragraphs 83- 88 and 97-104 of the Complaint.

In the Complaint, Caffeinate alleges that “[t]he exemplary claim chart below shows how the Wallet Nina infringes claim 1 of the D’091 Patent.”

alleges that “[ t]he exemplary claim chart below shows how the Wallet Nina infringes claim 1

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Complaint at pp. 17-18. However, these allegations and the remaining allegations relating to the D’091 Patent in the Complaint fail to meet the plausibility standard of Twombly-Iqbal. See Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 556 U.S. 662 (2009). Among other things, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal 556 U.S. at 678, (quoting Twombly, 550 U.S. at 570). A claim is facially plausible when the facts pled allow a “court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). In doing so, “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements” do not need to be credited.

Simply put, Caffeinate’s claim that Vante’s “WALLET NINJA”® product infringes the D‘091 Patent is not even remotely plausible because Vante’s “WALLET NINJA”® product is, without question, “sufficiently distinct” and “plainly dissimilar” in its overall visual appearance. See Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d 1312, 1335 (Fed. Cir. 2015) (“[w]here the claimed and accused designs are “sufficiently distinct” and “plainly dissimilar,” the patentee fails to meet its burden of proving infringement as a matter of law.”).

Among other things, Vante’s “WALLET NINJA”® product lacks the “monkey head” and related curves claimed in the D’091 Patent. There are many other differences as well that are obvious from reviewing the chart above. These differences, evaluated in the context of the claimed design as a whole, clearly establish that the ordinary observer test has not been met— and therefore that there is no infringement. See Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc) (A design patent is infringed “[i]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other.” (quoting Gorham Co. v. White, 81 U.S. 511, 528 (1871)).

Indeed, a

prominent expert in design law, Professor Sarah Burstein at the University of Oklahoma, has

commented about the weakness of Caffeinate’s clam on social media. See Figures 1-2 below (reprinting Prof. Burstein’s tweets).

Vante is not alone in believing that Caffeinate’s claim utterly lacks merit.

As you can see, Professor Burstein uses the term “concept fallacy” to describe how Caffeinate has completely misunderstood the analytical framework for determining design patent infringement. Professor Burstein further warns that “a design patent is infringed when the accused product *looks* the same as the claimed design” and notes that the reasoning used in Caffeinate’s complaint to allege design patent infringement “is not how the Egyptian Goddess test works.” Perhaps most tellingly, she concludes that Caffeinate’s claim of design patent infringement “is going in my file of ‘worst design patent claims I’ve ever seen’” and would be an “[e]asy [motion to dismiss] MTD under Ethicon.”

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Figure 1. Commentary of Professor Sarah Burstein Regarding Caffeinate’s Claim of Design Patent Infringement (see
Figure 1. Commentary of Professor Sarah Burstein Regarding Caffeinate’s Claim of
Design Patent Infringement (see https://twitter.com/design_law?lang=en).

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Figure 2. Further Commentary of Professor Sarah Burstein Regarding Caffeinate’s Claim of Design Patent Infringement
Figure 2. Further Commentary of Professor Sarah Burstein Regarding Caffeinate’s Claim
of Design Patent Infringement (see https://twitter.com/design_law?lang=en).

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For the reasons stated above, we demand that Caffeinate file the appropriate materials to amend its complaint to withdraw the claim against Vante, Inc. and Alexander Shlaferman relating to infringement of the D’091 Patent (including but not limited to withdrawing the allegations in paragraphs 83-88 and 97-104 of the Complaint) on or before Thursday, February 2, 2017 (as you know, Vante’s answer is due Friday, February 3, 2017). To the extent necessary, Vante consents to Caffeinate seeking leave to amend its Complaint provided that the amendments are for this sole purpose.

If Caffeinate does not agree to this demand by 6:00 p.m. Eastern on Wednesday, February 1, 2017, we intend to file a motion to dismiss Caffeinate’s claim relating to the D’091 Patent for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and may seek attorneys’ fees and costs associated with this matter.

In this regard, we would like to conduct a Local Rule 7.1(2) meet and confer tomorrow or Wednesday regarding this matter. We suggest 3:00 p.m. Eastern on either day, but are available at other times also. Please let us know your availability. Although we first made our intentions clear regarding this matter to Ms. Dinius in December, if Caffeinate requires additional time to analyze this issue, we are amenable to discussing a further extension for Vante to answer or otherwise respond to the Complaint.

We look forward to hearing from you.

Very truly yours,

to the Complaint. We look forward to hearing from you. Very truly yours, Richard S. Stockton

Richard S. Stockton BANNER & WITCOFF, LTD.

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EXHIBIT B

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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

CAFFEINATE LABS, INC., Plaintiff

v.

VANTE INC., a New York corporation, and ALEXANDER SHLAFERMAN, an individual, Defendants

Civil Action No. 1:16-cv-12480-GAO

JURY TRIAL DEMANDED

FIRST AMENDED COMPLAINT

Plaintiff Caffeinate Labs, Inc. files this First Amended Complaint against Vante Inc. and

Alexander Shlaferman (collectively “Defendants”) for the foregoing reasons:

PARTIES

1. Plaintiff, Caffeinate Labs, Inc. (“Caffeinate”) is a corporation organized and

existing under the laws of the Commonwealth of Massachusetts, having its usual place of

business at 170 Anderson Street, Portland, Maine 04101.

2. Vante Inc. is a New York corporation organized and existing under the laws of

New York, having a principal place of business at 1733 Sheepshead Bay Road, Suite 32,

Brooklyn, NY 11235.

3. Alexander Shlaferman, a/k/a Alex Xander, is an individual whose last known

address is 134 Bay 26 Street, Brooklyn, New York 11214.

JURISDICTION AND VENUE

4. Plaintiff’s claims arise out of patent infringement under Title 35 of the United

States Code, unfair business practices under the Lanham Act, Title 15 of the United States Code,

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and ancillary state law claims for unfair business practices, trade libel, interference with

advantageous business relations, and unjust enrichment.

5. This Court has subject matter jurisdiction over this action pursuant to

28 U.S.C. § 1331, 28 U.S.C. § 1332, and 28 U.S.C. § 1338. In addition, the Court has diversity

jurisdiction over this action pursuant to 28 U.S.C. § 1332 because Caffeinate and Defendants are

citizens of different states and the amount in controversy exceeds $75,000.00. Finally, this court

has ancillary jurisdiction over all state law causes of action pursuant to 28 U.S.C. § 1367.

6. Venue is proper under 28 U.S.C. § 1391(b) and (c) and § 1400(b). Defendants

have committed acts giving rise to each of the claims raised in this complaint in this District.

Defendants have regularly engaged in business in this Commonwealth and District and

purposefully availed themselves of the privilege of conducting business in this District.

7. Since learning about Plaintiff’s innovative and patented designs on or about

January 28, 2013, Defendants have been engaged in a scheme to willfully and knowingly

misappropriate the designs and features of Plaintiff’s patented works by developing a competing

product, which is of like design, purpose and function. Defendants’ competing product is sold

under the name of “Wallet Ninja.”

8. Defendants are known to advertise, offer for sale, and sell the Wallet Ninja at

brick and mortar stores located throughout the Commonwealth of Massachusetts including, but

not limited to, Staples, Office Depot, Walgreens and Walmart.

9. Defendants make the Wallet Ninja available to any person to buy, including to

Massachusetts residents, at these stores and on numerous online shopping platforms including

Amazon.com, Walmart.com, Staples.com, Walgreens.com, and Office Depot.

CAFFEINATE’S PATENT PORTFOLIO

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10. Caffeinate owns two issued patents and one pending patent application covering

its designs in its PocketMonkey® tool. The PocketMonkey is a flat, multi-purpose tool, which is

the size of a credit card.

11. The PocketMonkey was invented by Nathan Barr, President and Founder of

Caffeinate. The PocketMonkey has 12 tools as part of its design. They are: (1) a bottle opener;

(2) a flat screwdriver; (3) a Phillips screwdriver; (4) a micro screwdriver; (5) a phone kickstand;

(6) a set of 6 hex wrenches; (7) a fruit peeler; (8) a door latch slip; (9) an earbud cord wrap;

(10) a letter opener; (11) a ruler; and (12) a straight edge.

12. When Barr initially sought to design a multipurpose pocket tool that would fit

comfortably in a wallet, he encountered many design challenges. To his knowledge, there were

no multi-purpose tools that were as thin as a credit card. On the one hand, the design had to be

strong enough to function as a tool. For example, the screwdriver portion had to be able to

withstand the torque required to insert or remove a screw. The hex wrenches had to have

sufficient structural integrity such that they could insert or remove a hex bolt.

13. On the other hand, the design also had to be thin enough to fit in a wallet. Barr

wanted the whole tool to be about the size of a credit card in all dimensions. In addition, the

features had to be precise. For example, the eye glass screwdriver and the Phillips screwdriver

required precision cuts within the body of the multifunctional tool.

14. When Barr was working on various versions of the multifunctional tool, he relied

upon engineering principles to perfect the tools that are part of the PocketMonkey.

15. After making approximately one hundred revisions of the multifunctional tool,

Barr settled on the design that ultimately became the PocketMonkey.

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16. Barr initially applied for a patent on the PocketMonkey design on November 28,

2012. That application matured into United States Patent No. 9,302,383 entitled “Utility Tool

Device and Related Methods and Systems” (“the ‘383 patent”) on April 5, 2016. A true and

accurate copy of the ‘383 patent is attached hereto as Exhibit A.

17. On February 19, 2016, Caffeinate filed a continuation of the ‘383 Patent, entitled

“Utility Tool Device,” which was published as U.S. Patent Publication No. 2016/0176034 on

June 23, 2016. (“the ‘034 patent pub.”). This patent application is currently pending before the

United States Patent and Trademark Office (“USPTO”). A true and accurate copy of the ‘034

patent pub. is attached hereto as Exhibit B.

18. On March 15, 2013, Caffeinate applied for a design patent covering the novel

design features of the PocketMonkey. On June 17, 2014, the USPTO issued United States Patent

No. D707,091 entitled “Utility Tool,” (“the D’091 patent”). A true and accurate copy of the

D’091 patent is attached hereto as Exhibit C.

19. The ‘D’091 patent, the ‘383 patent, and the ‘034 patent pub. are assigned to

Caffeinate, which owns the full rights, title, and interest in these pieces of intellectual property.

20. The D’091 patent and the ‘383 patent have not expired and are in full force and

effect.

21. Pursuant to 35 U.S.C. § 282, the D’091 patent, the ‘383 patent, and all of their

respective claims are presumed valid.

22. Caffeinate marks its utility tools with notice information regarding its patents.

INITIAL MEETING BETWEEN THE PARTIES

23. On or about January 28, 2013, Nathan Barr, CEO of Caffeinate attended a

wholesale products and innovative designs tradeshow called NY NOW Market. He set up a

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booth at the NY NOW Market tradeshow so that he could display, and hopefully sell, his newly

designed PocketMonkey.

24. At some point during the tradeshow, Shlaferman approached Barr, who was

working Caffeinate’s booth, and asked questions about the PocketMonkey. The discussion

originally began as an inquiry into the features of the PocketMonkey. At some point,

Shlaferman offered to help Barr get the PocketMonkey into the sales channels at all of the major

big box stores.

25. The two met later that evening at Barr’s hotel, The Yotel, to further discuss

Shlaferman’s offer. During that meeting, Shlaferman stated that he would require a license to

Caffeinate’s intellectual property in order for him to assist in opening sales channels into major

big box stores. Shlaferman’s licensing terms essentially required Barr to relinquish all of his

rights and control in the intellectual property underlying the PocketMonkey. Shlaferman tried to

convince Barr that he would not succeed without him.

26. During those discussions, Barr notified Shlaferman that his utility tool designs

were patent pending.

27. On or about February 2, 2013, Barr received an email purportedly sent from

Shlaferman, wherein Shlaferman stated: “You've heard everything I've had to say and I hope you

realize my credibility. Please try to get an answer for me in the next days if possible. Think long

term. We are not building a product we are building a company and you need a partner who is

fully capable on all ends strategically, creatively, and technically. I am your one stop shop. This

is what you need even if you don't realize it yet. Trust me to do this for you and I will take you

and your product where you've never dreamed of. I want a long term relationship where we can

continue pumping out products and get into a cycle with these stores with your brand where we

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can predict their exact ordering schedule. With my guidance and your ingenuity we can make a

shitload of money. I take that back, we WILL make a shitload of money. Just give me the green

light and let's work.” A true and accurate copy of an email sent from alex@vantetoys.com to

nate@caffeinatelabs.com dated February 2, 2013 is attached hereto as Exhibit D.

28. In an email dated February 6, 2013, Barr rejected Shlaferman’s offer, again

reiterating that his designs were patent pending. Specifically, Barr stated: “As we talked about, I

think this product has a very strong patent position and doesn't necessitate taking shortcuts to

ensure beating out the competition. I have made it very clear in the market that this is patent

pending.” A true and accurate copy of the February 6, 2013 email from Barr to Shlaferman is

attached hereto as Exhibit E.

29. Not deterred, Shlaferman continued to try to persuade Barr to enter into a business

relationship with respect to the manufacturing, design, and sales of the technology embodied in

the D’091 and ‘383 patents. Specifically, on or about February 28, 2013, Shlaferman sent an

email to Barr acknowledging Barr’s rights and pleading: “Consider this. I'll give you a check

[for] 20 grand which is the guarantee for the first $200k in sales. It's yours to do as you please.

All I'm asking for are the full rights to distribute your item, the use of the name PocketMonkey

and the use of the design. I will give you a 10% royalty on lifetime sales. I just want this deal to

happen now. Truly Yours, Alex Shlaferman |www.vantetoys.com|# 718 332 5584|fax718 568

0258 Like us on Facebook! www.facebook.com/VanteToys.” A true and accurate copy of the

February 28, 2013 email from Shlaferman to Barr is attached hereto as Exhibit F.

30. On or about March 1, 2013, Barr sent an email rejecting Shlaferman’s proposed

terms for at least two reasons: (1) the royalty rate of 10% was too low; and (2) he had potential

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business partners offering better terms. A true and accurateaccurate copy of the March 1, 2013

email from Barr to Shlaferman is attached hereto as Exhibit G.

31. It subsequently appeared that, after Barr rejected Shlaferman’s proposed terms for

doing business together, Shlaferman substantially copied Barr’s design and features, developing

an infringing tool which ultimately became known as and sold under the name of the Wallet

Ninja.

32. Further evidencing Defendants’ desire to simply copy Plaintiff’s designs and to

palm-off of Plaintiff’s ingenuity and inventiveness, during the discussions between Barr and

Shlaferman, Barr told Shlaferman that he was also developing a credit card-sized pocketknife

which Barr told him he called Knife Ninja. When Barr learned that Defendants had released a

knock-off version of his PocketMonkey under the name “Wallet Ninja,” he recognized the need

to distinguish his products and changed the name of his pocketknife to Wildcard.

THE ACCUSED PRODUCT

33. The Wallet Ninja is a credit-card sized, multifunctional tool. On its packaging, it

purports to be the “World’s First 100% Flat Multi-Tool,” even though Defendants know this

statement is false because the PocketMonkey was patent-pending and offered for sale to the

public before the infringing Wallet Ninja was developed or sold.

34. The Wallet Ninja claims to have nearly identical features as the PocketMonkey.

Specifically, it has: (1) a bottle opener; (2) a flat screwdriver; (3) a Phillips screwdriver; (4) a

micro screwdriver; (5) a cellphone kickstand; (6) a set of 6 hex wrenches; (7) a fruit peeler; (8) a

letter opener; (9) a ruler; and (10) a straight edge. Of note, these feautures do not have the

design and craftsmanship of the PocketMonkey, which has tended to erode consumer confidence

in the PocketMonkey.

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35. The Wallet Ninja also copied the identical thickness and approach to making such

a thin tool, which at the time was novel.

36. Even though Shlaferman knew that Barr had applied for patent protection for his

PocketMonkey designs and functionality, he nonetheless applied for a design patent application

covering the Wallet Ninja on or about February 26, 2014. Shlaferman’s filing date for his patent

application was more than a year after he first saw the PocketMonkey for sale at the NY NOW

event and learned of the pending patent(s).

37. When Shlaferman applied for a patent on the design of the Wallet Ninja, he did

not disclose his knowledge of the PocketMonkey as a relevant piece of prior art to the USPTO as

is required by the rules of disclosure, candor, and good faith that govern the process of applying

for a patent. The rules of candor before the USPTO require all inventors and their attorneys to

disclose all known prior art to the Patent Office. See 37 C.F.R. § 1.56.

38. Defendants currently sell the Wallet Ninja in numerous online and brick and

mortar stores throughout the Commonwealth and other markets. The Wallet Ninja is sold in the

same streams of commerce as the PocketMonkey. In several instances, stores within the

Commonwealth sell both the PocketMonkey and the Wallet Ninja.

39. The PocketMonkey is made in the United States, whereas The Wallet Ninja is

made in China. Accordingly, the Wallet Ninja is usually available at a lower price than the

PocketMonkey.

40. Plaintiff purchased a Wallet Ninja in an Office Depot store located in

Marlborough, Massachusetts in August of 2016. Hight Decl., ¶ 3. Additionally, Caffeinate

bought a Wallet Ninja from an online retailer and had it shipped to Massachusetts. Barr Decl., ¶

13.

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DEFENDANTS’ MEDIA CAMPAIGN ADVERTISING WALLET NINJA

41. On information and belief, one or both Defendants operate and control a

Facebook page entitled “The Xander Experience.” The Xander Experience Facebook page is

used, among other things, to market, advertise, promote and comment on the Wallet Ninja

product.

42. In addition, Shlaferman has been interviewed numerous times regarding

the

purported innovations embodied within the Wallet Ninja which he claims as his own. These

interviews, some of which are discussed below, have been broadcast worldwide in video and

print format.

43. Beginning as early as August of 2013, Defendants embarked on a media

campaign replete with knowingly false and misleading statements about the origin of the design

for a flat, multipurpose tool. In August of 2013, Shlaferman was interviewed on the Howard

Stern show (“Howard Stern interview”). See Barr Decl., ¶ 7; See also

https://www.youtube.com/watch?v=zjrAwNwJQYQ

44. During the Howard Stern interview, Shlaferman demonstrated the Ninja product

for Mr. Stern and a large audience viewing the show live. See Barr Decl., ¶ 8.

45. The Howard Stern interview has been further broadcast via live television and

web-archives such as YouTube.

46. During the Howard Stern interview, Shlaferman evidenced an understanding of

intellectual property rights of others when he discussed the Swiss Army Knife trademark and

acknowledged that he could not characterize the Wallet Ninja as a type of Swiss Army Knife

because that term is trademarked. See Barr Decl., ¶ 8.

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47. Despite his basic understanding of trademark law, Shlaferman took credit during

the Howard Stern interview for designing the multi-purpose, flat tool he called Wallet Ninja,

when he knew that, in fact, Nate Barr was the original designer and inventor of a multi-purpose

flat tool called PocketMonkey that Shlaferman had substantially copied. See Barr Decl., ¶ 9.

48. These blatantly false claims of origin continued into the following year. For

example, in an October 22, 2014 interview, when asked “How did you come up with the idea for

the Wallet Ninja?” Shlaferman responded: “Out of a need to create a multi tool you could have

with you at all times without actually needing to take something extra with you”. A true and

accurate copy of this interview can be viewed at http://nextshark.com/20-year-old-entrepreneur-

is-so-successful-he-has-his-own-factory-in-china/

49. Shlaferman made the aforesaid statement with knowledge that Barr had already

designed and applied for patent protection for the PocketMonkey nearly two years prior to

making that statement.

50. Two days later, on October 24, 2014, Bloomberg aired an interview with

Shlaferman during which he again discussed his purported design of the Wallet Ninja. See Barr

Decl., ¶ 3. During that interview, Shlaferman stated that he had launched his Wallet Ninja

product sometime around October of 2013, which is nearly a year after the priority date for the

‘383 patent. See Barr Decl., ¶ 4.

51. Shlaferman also stated “I’m like vicious,” when describing how he had earned

$10 million in less than a year from sales of the Wallet Ninja. Id. at ¶ 5. In addition, Shlaferman

stated that he had been selling the Wallet Ninja in Walmart and Pet Boys.

52. During this same timeframe, Plaintifff’s patent applications for the desisgn and

utility of the PocketMonkey. Plaintiff filed for protection of the utility of the PocketMonkey

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design on November 28, 2012, nearly a year before Defendants’ launch of Wallet Ninja. The

‘383 patent application was published on May 29, 2014. Defendants claim to have made more

than $10 million in sales from the Wallet Ninja between October 2013 and October 2014.

53. Defendants were on notice of Plaintiff’s pending patent rights and therefore are

liable to Plaintitff for lost profits or a reasonable royalty for all sales of the Wallet Ninja

occurring after May 29, 2014.

54. Defendants are additionally liable to Plaintiff for a reasonable royalty or lost

profits for all sales of the Wallet Ninja that occurred after June 17, 2014, which is the issue date

of the D’091 patent.

DEFENDANTS DELIBERATELY UNDERCUT PRICING FOR POCKETMONKEY

55. The PocketMonkey was first sold to the public in November of 2012, which was

nearly a year before Defendants began selling their infringing Wallet Ninja. As such, Caffeinate

developed a market and a demand for a flat, multipurpose tool. Defendants avoided the tie and

financial investment necessary to develop that market and instead entered the game once the

market had been developed. In doing so, they capitalized on Plaintiffs’ design and investment by

diverting sales that would otherwise have gone to Caffeinate.

56. PocketMonkey is made in the United States, and is advertised accordingly.

57. The Wallet Ninja is made in China and imported into the United States.

58. In the Howard Stern interview Shlaferman stated “America sucks for consumer

goods. … The stuff you can do there [China] in a week, here [in the US] takes months.”

Shlaferman also discussed how much cheaper it is to manufacture in China as compared with the

United States. See Barr Decl., ¶ 10.

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59. Shlaferman also touted the advantages of manufacturing in China in an interview

with National Public Radio’s Kai Ryssdal on October 28, 2014. See Barr Decl., ¶ 11;.; .See also

http://www.marketplace.org/2014/10/28/business/21-year-old-who-owns-factory-china

60. Based on his conduct, it is clear that Shlaferman purposefully set out to disparage

the PocketMonkey and undercut the pricing of the PocketMonkey as a means of diverting sales

of the PocketMonkey toward the Wallet Ninja.

DEFENANTS’ DISPARAGEMENT CAMPAIGN AGAINST POCKETMONKEY

61. During the Howard Stern interview, Shlaferman discussed a Facebook page he

operates under the pseudonym Alex Xander called The Xander Experience.

62. Shlaferman has used the Xander Experience Facebook page, to among other

things, advertise impromptu parties he hosts. See Barr Decl., ¶ 12. One such party, for example,

occurred on the Manhattan Bridge. Id. The Manhattan Bridge party drew more than 1000 party

goers and resulted in Shlaferman being arrested. Id.

63. Shlaferman has also used the Xander Experience Facebook page to disparage,

libel, and make false and distorted claims about the PocketMonkey.

64. In November of 2014, Shlaferman asked thousands of his Facebook followers to

disparage Caffeinate’s PocketMonkey tool by posting his request on The Xander Experience

Facebook page. Specifically, Shlaferman posted “Wow I feel flattered that I was knocked off so

quickly with some garbage. I really need your guys help. After 6 months of development, sweat,

passion and tears, ThinkGeek needs to know this is not right. Please click on

http://www.thinkgeek.com/product/18c2/ And comment I prefer a Wallet Ninja

http://www.thinkgeek.com/product/1708/ Or anything of that variation. It would mean a huge

amount to me. Thank you.” (Xander Experience Disparagement Request”). A true and accurate

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copy of the November 30, 2014 quote from The Xander Experience Facebook page is attached

hereto as Exhibit H.

65. The link in the Xander Experience Disparagement Request led directly to an

advertisement of the PocketMonkey on a website known as ThinkGeek.

66. Many of Defendants’ followers heeded the Xander Experience Disparagement

Request and posted disparaging comments about the PocketMonkey online. The majority of the

disparaging comments were made on November 30, 2014, the same date as the Xander

Experience Disparagement Request was made. A true and accurate copy of this thread is

attached hereto as Exhibit I.

67. Those disparaging posts appeared on the Think Geek website as well as the

Xander Experience Facebook page.

68. On information and belief, customers, suppliers and other business contacts of

Caffeinate saw those disparaging and untrue posts.

69. Defendants knew at the time they made the Xander Experience Disparagement

Request that Nate Barr was the original inventor of the PocketMonkey, a flat, multipurpose tool,

which is the size of a credit card, and that Barr’s designs predated any designs they had for the

Wallet Ninja by a substantial amount of time. They therefore knew that their claims to be “first”

and their assertions that they were “knocked off so quickly with some garbage” were false,

misleading, and likely to cause economic injury to Caffeinate.

NOTICE OF INFRINGEMENT AND UNFAIR BUSINESS PRACTICES

70. On or about December 21, 2015, Caffeinate sent a letter to the registered agent for

Vante Inc. In that letter, Caffeinate provided written notice to Vante that the USPTO had

allowed the claims in the ‘383 patent. (“First Notice”). The First Notice was sent via certified

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mail, return receipt requested, to Vante’s agent of record as listed on the New York Secretary of

State’s website. A true and accurate copy of the December 21, 2015 letter is attached hereto as

Exhibit J.

71. In addition, the First Notice also notified Vante of its unfair business practices

under both state and federal law with respect to the unauthorized copying of the PocketMonkey

designs, the disparagement of PocketMonkey, and the false and misleading claims that

Caffeinate copied Defendants’ designs, when exactly the opposite was true.

72. Although Caffeinate had addressed the First Notice to Vante’s registered agent, an

entity who under law is required to be available to receive mail delivered via the U.S. Post

Office, the USPS was unable to deliver the First Notice after several failed attempts.

73. The First Notice was returned to Caffeinate’s counsel sometime on or about

February 10, 2016. The front of the envelope indicates that the USPS made at least two attempts

to deliver the First Notice. The envelope also indicates that the address for Vante’s registered

agent had a door, but no doorbell. The First Notice was returned with a sticker, which states

“Return to Sender[.] Unclaimed[.] Unable to Forward[.] Return to Sender[.]” A true and accurate

copy of the unopened, undelivered First Notice is attached hereto as Exhibit K.

74. On or about February 22, 2016, Caffeinate’s counsel sent an email, attaching the

December 21, 2015 letter, to Vante and to Shlaferman at the following addresses:

alex@vantetoys.com and vantetoys@gmail.com (“Second Notice”). A true and accurate copy of

the February 22, 2016 email to Defendants is attached hereto as Exhibit L.

75. On or about March 2, 2016, Caffeinate attempted for a third time to provide

notice of Defendants’ infringement and unfair business practices (“Third Notice”). This time

Caffeinate sent a letter to: 1733 Sheepshead Bay Road Suite 32, Brooklyn, NY 11235, which is

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the address Defendants provided to the USPTO on their trademark application for the Wallet

Ninja mark. A true and accurate copy of the March 2, 2016 letter is attached hereto as

Exhibit M.

76.

On March 4, 2016, Vante’s attorney acknowledged receipt of the Second Notice.

In his email, Vante’s counsel stated that he was reviewing the Second Notice and he would

respond in due course.

77. To date, Defendants have not provided any substantive response to the First

Notice, the Second Notice, or the Third Notice.

78. Vante’s failure to provide a valid address for receipt of business mail harmed

Caffeinate because, once an infringer is put on notice, s/he is subject to willful damages if the

infringement continues after the notice date. By effectively dodging notice by failing to provide

a valid mailing address for receipt of notice, Defendants were able to move the notice date for

purposes of calculating willful damages.

INFRINGEMENT OF THE ‘383 PATENT

79. Rather than innovate on their own, Defendants copied Caffeinate’s patented

designs for its flat, multifunctional pocket tool as embodied in the ‘383 patent.

80. Defendants do not have permission or any other lawful right to use Caffeinate’s

inventions as disclosed in the ‘383 patent or in its child, the ‘034 patent pub.

81. The following exemplary claim chart, created based upon one of many online

advertisements for the Wallet Ninja, shows how the Wallet Ninja infringes claim 1 of the ‘383

patent. A true and accurate copy of an advertisement for the Wallet Ninja, appearing at

https://www.vat19.com/item/wallet-ninja-multi-tool is attached hereto as Exhibit N.

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82. This claim chart is based on preliminary analysis and may be amended or

supplemented after further investigation and discovery in this action. This claim chart is for

notice purposes under Fed. R. Civ. P. 8 and 12.

Claim Element (Claim 1 of ‘383 patent)

Infringing Feature of Accused Product

A

device, comprising::.

 

a substantially flat body comprising two or

“This perfectly flat multi-tool packs six

more tools;

wrenches, four screwdrivers, two rulers, a

cellphone stand, a bottle opener, a can opener,

a letter opener, a box cutter, and a fruit peeler

into a single piece of steel the size of a credit

card.” Ex. NO, p.1.

wherein the two or more tools are formed in

See image Ex. NO, p. 3 showing two or more

or

on the body by one or more of cutouts,

tools formed in or on the body by one of more

apertures, contours and inscriptions;

cutouts, apertures, contours, and inscriptions.

See also image Ex. NO, pp. 4, 5, 6, 7.

wherein the body further comprises an

“With the help of a credit card, you can

undulating curvilinear elongate aperture

transform the Wallet Ninja into a smartphone

passing therethrough, the undulating

stand.” Ex. NO, p. 6; see also image Ex. NO,

curvilinear elongated aperture being

p. 6.

approximately 53.98 mm long and configured

to

accept and frictionally engage with an

approximately credit card-sized supporting

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member:

 

and wherein the flat body is formed of a heat

“Material: 4X heat treated steel” Ex. NO, p. 2

treated metal.

INFRINGEMENT OF THE D’091 PATENT

83. The chart below shows a pictorial comparison of one of the claims of the D’091

patent as compared with the infringing Wallet Ninja.

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Claim Element of D’091 patent

Infringing Device

19 of 35 Claim Element of D’091 patent Infringing Device Approximate outline: 84. Rather than innovate

Approximate outline:

of D’091 patent Infringing Device Approximate outline: 84. Rather than innovate on its own, Defendants copied
of D’091 patent Infringing Device Approximate outline: 84. Rather than innovate on its own, Defendants copied

84. Rather than innovate on its own, Defendants copied Caffeinate’s patented designs

for its flat, multifunctional pocket tool as embodied in the D‘091 patent.

85. Not deterred by Barr’s decision to forego a business relationship, Defendants

reached out to Caffeinate’s manufacturer in March of 2013 to get a price quote for

manufacturing a knock-off of the PocketMonkey. Defendants sent an email and a schematic

showing what would ultimately become the Wallet Ninja to Prototype & Short-Run Services,

Inc., a company in California who had been manufacturing the PocketMonkey for Caffeinate.

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86. In a March 21, 2013 email, a representative from Prototype & Short-Run

Services, Inc. responded to an inquiry Shlaferman had made requesting a price quote for

manufacturing a knock-off of the then patent pending PocketMonkey. A true and accurate copy

of the March 21 email thread and attached design of the Wallet Ninja is attached hereto as

Exhibit O.

87.

As can be seen from the original design of the Wallet Ninja, as well as Exhibit N

showing the current design of the Wallet Ninja, Defendants intended to copy the patented design

and utility features of the PocketMonkey from the outset.

88. Both the PocketMonkey and the Wallet Ninja are credit card sized devices having

a collection of tools formed into the body of the device. Tools, by their nature, have aspects of

functionality. A collection of tools, however, and the choice of which tools to include, as well as

the locations of each of the tools on the body of the device are ornamental design features.

89. When comparing the design of the PocketMonkey, as a whole, to the design of the

Wallet Ninja, as a whole, it is readily apparent that the designs would appear substantially the

same to an ordinary observer. The bottle openers are both in relatively similar locations. The

bottom two corners both have larger screwdrivers. The top-left corners are both a micro

screwdriver. The phone kickstands are both above the bottom edge. The wrenches are both

positioned in the lower center.

90. First, Defendants chose to include a nearly identical compilation of tools in their

multipurpose tool. The following table presents a comparison of the tools Plaintiff chose to

include in its original design of the PocketMonkey, which predates any designs of Wallet Ninja,

and a list of tools Defendants chose in their infringing Wallet Ninja.

PocketMonkey

Wallet Ninja

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Eyeglass screwdriver

Eyeglass screwdriver

Philips screwdriver

Philips screwdriver

Flat head screwdriver

Flat head screwdriver

Set of 6 hex wrenches

Set of 6 hex wrenches

Phone kickstand

Phone kickstand

Fruit peeler

Fruit peeler

Bottle opener

Bottle opener

Ruler

Ruler

Letter opener

Letter opener

Door lock slip

Nail puller

Ear bud cord wrap

Can opener

91. Of the eleven types of tools featured in the PocketMonkey, Defendants chose to

copy nine of those tools in the Wallet Ninja.

92. In addition to substantial overlap between the types of tools chosen, the types of

tools included are fanciful in that they combine tools needed for disparate activities.

93. In the prior art of record for the D’091 patent, there were 15 cited prior art

references. Of those 15 references, only one combined tools for disparate activities, namely

D126,253, which was a patent for a combination screwdriver and bottle opener. All of the other

references were for tools related to a single activity, e.g., can openers, caulking tool, clothing

cutter, desk accessories, lid removal, barbeque grill scraper, bottle opener, a cutter, and an

automobile escape tool.

94. In contrast, the PocketMonkey combined disparate tools not typically associated

with a single activity such as screwdrivers, hex wrenches, an eye glass screwdriver, a fruit

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peeler, a phone kickstand, an ear bud cord wrap, a bottle opener, a letter opener, a ruler, and a

door latch opener.

95. As can be seen from the chart above, Defendants copied this heretofore unique

combination of tools by copying the vast majority of the tool collection in their infringing Wallet

Ninja.

96. The positioning of several of the tools in the Wallet Ninja mimics positioning for

those same tools in the PocketMonkey. For example, the PocketMonkey features three

screwdrivers positioned on the corners of its design. Defendants similarly positioned Wallet

Ninja’s screwdrivers on the corners of the Wallet Ninja.

97. The choice to position screwdrivers on the corners is not mandated by the

function of a screwdriver. The screwdrivers on Wallet Ninja would function as screwdrivers if

they were placed in alternative locations, for example anywhere along an outer edge, or

protruding from the flat plate.

98. The PocketMonkey features a letter opener proximal to an eye glass screwdriver.

The Wallet Ninja likewise has a letter opener proximal to an eye glass screwdriver.

99. The PocketMonkey has two contiguous cutouts adjacent to the micro screwdriver

that form a “double arch” with the letter opener and the cord wrap. The Wallet Ninja likewise

has two contiguous cutouts adjacent to the micro screwdriver that form a “double arch” with the

letter opener and the box opener.

100. The PocketMonkey has a cutout suited for creating a phone kickstand by inserting

a credit card sized object into the cutout. The phone kickstand cutout in the PocketMonkey is

situated right below the hex wrenches.

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101. The Wallet Ninja also has a phone kickstand cutout. The Wallet Ninja phone

stand cutout is situated right above the hex wrenches on the Wallet Ninja.

102. The PocketMonkey has an undulating form to the phone kickstand slot. The

Wallet Ninja likewise has an undulating form to the phone kickstand slot.

103. The PocketMonkey design includes the face of a monkey, which is part of its

trade name. The Wallet Ninja includes the face of a ninja embossed on its surface, the eye mask

of the Ninja acting as the bottle opener.

104. In the PocketMonkey, the bottle opener is placed in close proximity to the

monkey’s face. In the Wallet Ninja, the bottle opener is part of the ninja’s face.

105. In the PocketMonkey, the bottle opener is a “bean” shaped cutout. This was an

ornamental choice not previously seen in the prior art. In the Wallet Ninja, the bottle opener is a

bean shaped cutout.

106. The PocketMonkey includes a small circular hole that is not part of the tool’s

function. The Wallet Ninja has small circular holes that are not part of the tool’s function.

107. In addition to these characteristics, which would be evident to an ordinary

observer, there has been actual confusion between the PocketMonkey and the Wallet Ninja.

Members of Caffeinate’s sales team have had several conversations with consumers who have

confused the Wallet Ninja with the PocketMonkey.

85.108. Defendants do not have permission to use Caffeinate’s inventions as

disclosed in the D‘091 patent.

86.

The exemplary claim chart below shows how the Wallet Ninja infringes claim 1

of the D’091 patent.

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87.

As can be seen from the claim chart below, an ordinary observer would think that

the accused design is substantially the same as the patented design when the two designs are

compared to one another. This is particularly so because the PocketMonkey was the first tool of

its kind, i.e., a truly credit card sized, in all dimensions, multifunctional tool, to hit the consumer

market.

88.

Barr spent a considerable amount of time designing the look of the PocketMoney.

In his final design, he was able to incorporate twelve tools into the PocketMonkey. Of those

twelve tools, Defendants infringing product copies eight of them.

89.109.

This claim chart is based on preliminary analysis and may be amended or

supplemented after further investigation and discovery in this action. This claim chart is for

notice purposes under Fed. R. Civ. P. 8 and 12.

Claim Element of D’091 patent Infringing Device
Claim Element of D’091 patent
Infringing Device

COUNT ONE (Infringement of the ‘383 Patent) (Against Both Defendants)

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90.110. Caffeinate re-alleges and incorporates by reference all of the allegations in

paragraphs 1 through 10888 as if fully set forth herein.

91.111. Defendants, jointly or severally, have been and are still infringing one or more

claims of the ‘383 patent by manufacturing, using, selling, importing, or offering for sale the

Wallet Ninja within the United States in violation of 35 U.S.C. § 271,

92.112. Defendants had actual notice of the pending patents that ultimately issued as the

‘383 patent at least as early as February 6, 2013.

93.113. Defendants had constructive notice of the ‘383 patent at least as early as April 5,

2016 because Caffeinate marks its Pocket Monkey products with patent notices.

94.114. Defendants had actual notice of the ‘383 patent at least as early as February 22,

2016.

95.115. Defendants have profited and continue to profit from their manufacture, use, sale,

offers to sell, and importation of the Wallet Ninja.

96.116. Defendants’ infringement of the ‘383 patent is wanton, willful, and deliberate.

97.117. Caffeinate has suffered and continues to suffer damages and irreparable harm

because of Defendants’ infringement of the ‘383 patent.

COUNT TWO (Infringement of the D’091 Patent) (Against Both Defendants)

98.118. Caffeinate re-alleges and incorporates by reference all of the allegations

contained in paragraphs 1 through 11696 as if fully set forth herein.

99.119. Defendants, jointly and severally, have been and are still infringing one or more

claims of the D‘091 patent by manufacturing, using, selling, importing, or offering for sale the

Wallet Ninja within the United States in violation of 35 U.S.C. § 271,

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100.120. Defendants had actual notice of the pending patents that ultimately issued as the

D’091 patent at least as early as February 6, 2013.

101.121. Defendants had constructive notice of the D’091 patent at least as early as June

17, 2014 because Caffeinate marks its Pocket Monkey products with patent notices.

102.122. Defendants had actual notice of the D‘091 patent at least as early as February 22,

2016.

103.123. Defendants have profited and continue to profit from their manufacture, use, sale,

offers to sell, and importation of the Wallet Ninja.

104.124. Defendants’ infringement of the D’091 patent is wanton, willful, and deliberate.

105.125. Caffeinate has suffered and continues to suffer damages and irreparable harm

because of Defendants’ infringement of the D’091 patent.

COUNT THREE (Unfair Business Practices – Section 43(a) of the Lanham Act 15 U.S.C § 1125) (Against Both Defendants)

106.126. Caffeinate re-alleges and incorporates by reference all of the allegations in

paragraphs 1 through 1204 as though fully set forth herein.

107.127. Defendants, jointly and severally, have been and are still committing unfair

business practices in violation of in violation of 15 U.S.C. § 1125, the Lanham Act.

108.128. Defendants’ actions include, without limitation, using in commerce, in connection

with goods or services false designations of origin, false or misleading descriptions of fact,

and/or false or misleading representation of fact, which have caused and continue to cause

confusion and mistake to the general public, and have deceived and continue to deceive as to the

affiliation, connection, or association of such person with another person, or as to the origin,

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sponsorship, or approval of his or their goods, services, or commercial activities by another

person.

109.129. In addition, Defendants have in the past and continue to presently: misrepresent

the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods,

services, or commercial activities, in commercial advertising or promotions.

110.130. The above-described acts and practices by Defendants have and are likely to

continue to purposefully mislead or deceive the general public and therefore constitute unfair

competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).

111.131. Defendants acted willfully and intentionally in claiming to be the world’s first flat

multipurpose tool, in disparaging the PocketMonkey, in enlisting their customers to disparage the

PocketMonkey, in falsely claiming that Caffeinate copied their design for a multipurpose tool,

when they knew the opposite was true, among other things.

112.132. The unlawful and fraudulent business practices of Defendants, as detailed

throughout this complaint, present a continuing threat to, and are intended to deceive members of

the public, in that Defendants continue to promote the Wallet Ninja by trading on the goodwill of

PocketMonkey, which was in fact developed, patented, and sold long before the Pocket Ninja

was purportedly developed, marketed, or sold.

113.133. Defendants knew of Caffeinate’s designs and patent pending status when they

purported to invent the Wallet Ninja. In fact, Defendants had discussed creating a partnership

with Caffeinate and/or licensing Caffeinate’s intellectual property for a multipurpose tool. When

Caffeinate rejected Defendants’ offers to license or partner, Defendants wrongfully

misappropriated Caffeinate’s proprietary intellectual property for themselves.

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114.134. In doing so, Defendants obviated the need to invest their own time and money to

develop a multipurpose tool of their own. Instead, Defendants reaped the monetary benefits of

selling the infringing Wallet Ninja without having invested the time, effort, ingenuity and money

required to design a functioning, low profile, multipurpose pocket tool.

115.135. Defendants created and/or seized opportunities to publicly disparage the

PocketMonkey and to claim that they were in fact the first to invent a multipurpose pocket tool.

116.136. Caffeinate has been and continues to be irreparably harmed by Defendants’

conduct; and Caffeinate lacks an adequate remedy at law to prevent such ongoing harm and

damage to its’ goodwill and reputation as well as that of the PocketMonkey.

117.137. Defendants by their own admission have profited from their false and misleading

advertising and unfair business practices.

118.138. Caffeinate has sustained monetary damages as a result of Defendants’ false and

misleading advertising and unfair business practices in an amount to be proven at trial.

119.139. Because Defendants’ actions have been willful, Caffeinate is entitled to recover

treble its actual damages or Defendants’ profits, whichever is greater, and to an award of costs,

and this being an exceptional case, reasonable attorneys’ fees pursuant to 15 U.S.C. § 1117(a).

120.140. As a direct and proximate result of Defendants’ wrongful conduct, Caffeinate has

been injured in fact and has lost money and profits. Such harm will continue unless Defendants’

acts are enjoined by this Court. Caffeinate has no adequate remedy at law for Defendants’

continuing violation of its rights.

COUNT FOUR (Unfair Business Practices in Violation of Mass. G.L. Ch. 93A) (Against Both Defendants)

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121.141. Caffeinate re-alleges and incorporates by reference all of the allegations in

paragraphs 1 through 1319 as if fully set forth herein.

122.142. Defendants, jointly and severally, have been and are still committing unfair and

deceptive business practices in violation of the laws of the Commonwealth and specifically in

violation of Mass. G.L. Ch. 93A.

123.143. Defendants wereDefendantswere on notice of Caffeinate’s claims arising out of

their conduct in violation of Mass. G.L. Ch. 93A at least as early as February 22, 2016.

124.144. Defendants failed to respond to Caffeinate’s demands made pursuant to Mass.

G.L. Ch. 93A.

125.145. Defendants’ actions include, without limitation, using in commerce, in connection

with goods or services, false designations of origin, false or misleading descriptions of fact,

and/or false or misleading representations of fact, which have caused and continue to cause

confusion, mistake, and have deceived and continue to deceive consumers and the public as to

the affiliation, connection, or association of such person with another person, or as to the origin,

sponsorship, or approval of their goods, services, or commercial activities by another person.

126.146. In addition, Defendants have in the past and continue to presently: misrepresent

the nature, characteristics, qualities, or geographic origin of their goods, services, or commercial

activities, in commercial advertising or promotion.

127.147. The above-described acts and practices by Defendants are likely to mislead or

deceive the general public and therefore constitute unfair competition under Mass. G.L. Ch. 93A.

128.148. Defendants acted willfully, knowingly and intentionally in claiming to be the

world’s first multipurpose tool, in disparaging the PocketMonkey, in actively enlisting their

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customers to disparage the PocketMonkey, in falsely claiming that Caffeinate copied their design

for a multipurpose tool, when they knew the opposite was true, among other things.

129.149. The unlawful and fraudulent business practices of Defendants, as detailed

throughout this complaint, present a continuing threat to, and are meant to deceive members of

the public, in that Defendants continue to promote the Wallet Ninja by trading on the goodwill of

PocketMonkey, which was in fact the developed, patented, and sold by Plaintiffs long before the

Pocket Ninja was purportedly invented, marketed, or sold.

130.150. Defendants knew of Caffeinate’s designs and patent pending status when they

purported to invent the Wallet Ninja. In fact, Defendants had proposedcreating a partnership

with Caffeinate and/or licensing Caffeinate’s intellectual property for a multipurpose tool. When

Caffeinate rejected Defendants’ offers to license or partner, Defendants wrongfully

misappropriated Caffeinate’s proprietary intellectual property for their own gain.

131.151. In doing so, Defendants obviated the need to invest their own time and money to

develop a multipurpose tool of their own. Instead, Defendants reaped the monetary benefits of

selling the infringing Wallet Ninja without having invested the time, effort, ingenuity and money

required to design a functioning, low profile, multipurpose pocket tool.

132.152. Defendants created and/or seized opportunities to publicly disparage the

PocketMonkey and to claim that they were in fact the first to invent a multipurpose pocket tool.

133.153. Caffeinate has been and continues to be irreparably harmed by Defendants’

conduct; and Caffeinate lacks an adequate remedy at law to prevent such ongoing harm and

damage to its’ goodwill and reputation as well as that of the PocketMonkey.

134.154. Defendants have wrongfully gained profits by virtue of their false, deceptive and

misleading advertising and unfair business practices.

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135.155. Caffeinate has sustained monetary damages as a result of Defendants’ false,

deceptive and misleading advertising and unfair business practices in an amount to be

determined at trial.

136.156. As a result of Defendants’ willful conduct as aforesaid, Caffeinate is entitled to

recover punitived damages in an amount double or treble the actual damages assessed or

Defendants’ profits, whichever is greater, and to an award of costs and reasonable attorneys’ fees

pursuant to Mass. G.L. Ch. 93A.

137.157. As a direct and proximate result of Defendants wrongful conduct and unfair or

deceptive acts or practices, Caffeinate has suffered actual damages and has lost money and

profits. Such harm will continue unless Defendants’ conduct is enjoined by this Court.

Caffeinate has no adequate remedy at law for Defendants’ continuing violations of its rights.

COUNT FIVE (Interference with Advantageous Business Relations) (Against Both Defendants)

138.158. Caffeinate re-alleges and incorporates by reference the allegations in paragraphs 1

through 1536 as if fully set forth herein.

139.159. By their conduct alleged herein, Defendants have wrongfully interfered with

Caffeinate’s advantageous business relations with its customers, its suppliers, its resellers, and

others with whom Caffeinate does business. By posting disparaging remarks about Caffeinate’s

products, proactively encouraging their followers to disparage Caffeinate’s products, claiming to

manufacture and distribute the world’s first 100% flat multi-tool, among other things,

Defendants have wrongfully interfered with Caffeinate’s business relationships.

140.160. Defendants knew that Caffeinate was marketing and selling the PocketMonkey

and that Caffeinate enjoyed an economic benefit from those sales.

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141.161. Defendants knew that Caffeinate had customers and other business relationships

with third parties.

142.162. Defendants motives were improper, wrongful and unlawful.

143.163. Caffeinate lost sales and goodwill in an amount to be determined at trial as a

proximate result of Defendants’ lies regarding, among other things: (1) who was first to market

with a 100% flat multi-tool; (2) who copied whose intellectual property.

COUNT SIX (Commercial Disparagement) (Against Both Defendants)

144.164. Caffeinate re-alleges and incorporates by reference all of the allegations in

paragraphs 1 through 1642 as if fully set forth herein.

145.165. Defendants are known to have published false statements in the following places:

(1) the packaging for their Wallet Ninja tool; (2) on the Xander Experience Facebook page;

(3) on the ThinkGeek website; and (4) in interviews in print and video mediums available on the

Web.

146.166. Defendants’ false statements were harmful to Caffeinate and its owner Nathan

Barr.

147.167. Caffeinate suffered pecuniary loss and loss of its goodwill in an amount to be

determined at trial.

148.168. Defendants intended to harm Caffeinate by virtue of their false statements.

149.169. Defendants knew their statements were false at the time they were made.

150.170. Defendants acted with reckless disregard for the truth or falsity of the statements

made and described herein.

COUNT SEVEN

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(Unjust Enrichment) (Against Both Defendants)

151.171. Caffeinate re-alleges and incorporates by reference all of the allegations in

paragraphs 1 through 1649 as if fully set forth herein.

152.172. As a result of the aforesaid conduct, Defendants have been unjustly enriched to

Caffeinate’s detriment. Caffeinate seeks a full accountingfullaccounting and disgorgement of all

ill-gotten gains and profits resulting from Defendants’ inequitable activities.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff Caffeinate Labs, Inc., respectfully requests relief as follows:

A. A declaratory judgment that Vante and/or Shlaferman has infringed one or more of the

claims of the asserted patents;

B. An order for injunctive relief and final judgment preliminarily and permanently enjoining

Shlaferman and Vante and its officers, directors, agents, servants, employees, affiliates,

attorneys, and all others acting in privity or concert with them, and their parents, subsidiaries,

divisions, successors and assigns, from further acts of infringement of Caffeinate’s asserted

patents;

C. A judgment awarding Caffeinate monetary damages adequate to compensate for

Defendants’ infringement of Caffeinate’s asserted patents, and a reasonable royalty based on

Defendants’ sales of infringing products, as well as all pre-judgment and post-judgment interest

at the maximum rate permitted by law;

D. A judgment awarding Caffeinate punitive damages including treble damages based on

any infringement found to be willful, pursuant to 35 U.S.C. § 284, together with prejudgment

interest;

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E. Judgment for actual damages suffered by Caffeinate as a result of Defendants’ unlawful

conduct, in an amount to be determined at trial, as well as prejudgment interest as authorized by

law;

F. Reasonable funds for corrective advertising;

G. An accounting of Defendants’ profits pursuant to 15 U.S.C. § 1117;

H. A judgment trebling any damages award pursuant to 15 U.S.C. § 1117;

I. Punitive damages and injunctive relief pursuant to Mass. G.L. Ch. 93A;

J. Restitution relief against Defendants and in favor of Caffeinate, including disgorgement

of wrongfully obtained profits and other appropriate relief;

K. Costs of suit and reasonable attorneys’ fees; and

L. Any other relief to which Caffeinate is entitled under any state or federal law.

DEMAND FOR JURY TRIAL

Caffeinate Labs, Inc. demands a jury trial for all issues so triable.

CAFFEINATE LABS, INC.

By its attorneys,

/s/ Anne-Marie Dinius Anne-Marie Dinius BBO# 647556 amdinius@amdiniuslaw.com AMDinius Law

101 Great Road, #119

Bedford, MA 01730 (650) 814-0810

Jonathan Braverman JonathanB@BBB-lawfirm.com

Baker, Braverman & Barbadoro

300 Crown Colony Dr #500

Quincy, MA 02169 (781) 848-9610

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CERTIFICATE OF SERVICE

I hereby certify that this document filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) and paper copies will be sent to those indicated as non-registered participants on February 9, 2017.

/s/ Anne-Marie Dinius

Anne-Marie Dinius

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EXHIBIT C

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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

CAFFEINATE LABS, INC.,

Plaintiff,

v.

VANTE INC., a New York corporation, and ALEXANDER SHLAFERMAN, an individual,

Defendants.

Civil Action No.: 1:16-cv-12480-GAO

DEFENDANTS’ MOTION FOR SANCTIONS

I.

INTRODUCTION

Since

the

filing

of

this

case,

Defendants

Vante

Inc.

and

Alexander

Shlaferman

(collectively, “Vante”) have repeatedly asked Plaintiff, Caffeinate Labs, Inc. (“Caffeinate”) to

withdraw the asserted claim of design patent infringement of U.S. Pat. No. D707,091 (the

“D’091 Patent”) because it is entirely baseless and irreparably flawed. As Vante has reiterated,

the accused product is “plainly dissimilar” from the asserted claim of the D’091 Patent, meaning

the infringement claim “fails … as a matter of law” under controlling Federal Circuit precedent

and therefore has zero merit.

Indeed, one third-party authority on design patent law succinctly summarized the glaring

deficiencies of Caffeinate’s claim by describing it as “exceptionally terrible,” and “one of the

worst design patent claims [they’ve] ever seen.” (See Commentary of Professor Sarah Burstein

provided through the Declaration of Richard S. Stockton (“Stockton Decl.”) (filed concurrently)

at Exs. 3-4). But even after Vante’s continued efforts to convince Caffeinate to withdraw the

frivolous

claim

of

design

patent

infringement,

Caffeinate

filed

its

Amended

Complaint

maintaining it. Caffeinate’s continued insistence in pursuing this unfounded claim in bad-faith

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wastes this Court’s resources, needlessly and unreasonably expands the scope of this litigation,

and prejudices Vante by pointlessly increasing its costs in defending this suit.

Because Caffeinate’s design patent infringement allegations are frivolous and Caffeinate

has reasserted the claim in bad-faith, despite clear notice of their deficiencies, Vante respectfully

moves for sanctions and attorneys’ fees pursuant to Rule 11(b) of the Federal Rules of Civil

Procedure, at least because Caffeinate’s claim is not “warranted by existing law” as required

under the Rule, FED. R. CIV. P. 11(b), and request that Vante be awarded its reasonable

attorneys’

fees

in

defending

against

the

claim.

Additionally,

Caffeinate’s

insistence

on

continuing to pursue this claim, despite Vante pointing out its deficiencies on numerous

occasions, has unreasonably and vexatiously multiplied the proceedings in this case and

alternatively warrants attorney’s fees allowed under 28 U.S.C. § 1927. Finally, for all of the

above reasons, Caffeinate’s conduct is also sanctionable under the Court’s inherent power.

II. FACTUAL BACKGROUND

Caffeinate filed its original complaint asserting a design patent infringement claim on

December 7, 2016. (ECF 1). Vante then contacted Caffeinate regarding the deficiencies of the

claim and its withdrawal on December, 21 2016, informing Caffeinate that, if needed, Vante

would move to dismiss the claim and reserved the right to seek sanctions and attorneys’ fees.

(Stockton Decl. at ¶ 1). Vante reiterated its withdrawal demand in a letter on January 30, 2017.

(See Stockton Decl. at Ex. 1). In this letter, Vante explained its demand by, among other things,

citing to controlling Federal Circuit design patent law and showing how the appearances of the

patent claim and the accused product simply could not give rise to infringement under these

controlling standards.

(Id.). Vante further identified third-party commentary from a design law

expert, Professor Sarah Burstein, that harshly criticized Caffeinate’s claim, explaining it relied

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on a “concept fallacy,” among other comments, and concluding that the claim “is going in my

file of ‘worst design patent claims I’ve ever seen.’” (Id.; see also Stockton Decl. at Ex. 2, 4-5). 1

Excerpts of Example Posts from Professor Sara h Burstein (Stockton Decl. at Exs. 4-5)
Excerpts of Example Posts from Professor Sara h Burstein (Stockton Decl. at Exs. 4-5)
Excerpts of Example Posts from Professor Sara h Burstein (Stockton Decl. at Exs. 4-5)

Excerpts of Example Posts from Professor Sarah Burstein (Stockton Decl. at Exs. 4-5)

1 Professor Burstein also independently acknowledged the patent claim and accused product are “plainly[ ]dissimilar”. (Stockton Decl. at Ex. 2).

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Despite Vante pointing out the baselessness of Caffeinate’s claim, and its attempts to

resolve the issue amicably and without Court intervention, instead of withdrawing the claim for

design patent infringement, Caffeinate doubled-down on it when filing its Amended Complaint

by adding additional, but irrelevant, details. (ECF 18). Vante therefore had no choice but to file a

motion to dismiss the design patent claim. (ECF 20).

While Caffeinate did add some allegations to its design patent claim, none of this

additional commentary alters the critical issue: the claim of Caffeinate’s design patent doesn’t

look anything like the accused Vante product. This conclusion is inescapable and no amount of

allegations could somehow render the claim plausible. Indeed, as Vante lays out in its Motion to

Dismiss, Caffeinate’s additional allegations either confirmed the frivolity of the claim or failed to

add any substance to their design claim. For example, Caffeinate made statements conceding and

acknowledging multiple dissimilarities between the D’091 patent claim and the accused

products, and simply added irrelevant content that should be entirely disregarded, such as the

“approximate outline” of Vante’s accused product. (See, e.g., ECF 20 at 6). And again, the third-

party commentary of Professor Burstein corroborates that Caffeinate’s Amended Complaint fares

no better, as Professor Burstein appeared to acknowledge and review the Amended Complaint

filing on February 14, 2017, but later still described the claim as “exceptionally terrible.”

(Stockton Decl. at Exs. 3, 6):

Excerpt of Example Post from Professor Sarah Burstein (Stockton Decl. at Ex. 3)
Excerpt of Example Post from Professor Sarah Burstein (Stockton Decl. at Ex. 3)

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Even after the additional explanation of Vante’s Motion to Dismiss, however, Caffeinate

continues to defend the claim and filed its Opposition to Vante’s Motion on March 16, 2017.

(ECF 26). But again, nothing in response changes the reality that design claim and the accused

product look nothing alike.

Caffeinate’s continued assertion and defense of the flawed claim in the face of contrary

legal authority, third-party criticism, and Vante’s repeated attempts to resolve the issues

amicably can only be the result of a bad-faith desire to prejudice Vante by increasing its fees.

III. LEGAL ARGUMENT

A. Frivolous Design Patent Claims are Subject to Sanctions

A “claim is frivolous under Rule 11 when it is ‘either not well-grounded in fact or

unwarranted by existing law.’” McCarty v. Verizon New England, Inc., 772 F.Supp.2d 362, 365

(D. Mass. 2011) (citing Cruz v. Savage, 896 F.2d 626, 632 (1st Cir. 1990)). Rule 11 “provides

for the imposition of sanctions against an attorney who files a pleading, motion or paper that is

not well grounded in fact or is not warranted by existing law or a good faith argument for the

extension, modification, or reversal of existing law, or is interposed for any improper purpose,

such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.”

Nyer v. Winterthur Intern., 290 F.3d 456, 460-62 (1st Cir. 2002) (finding a claim frivolous where

“no attorney…could reasonably have believed that the facts of this case could sustain a claim.”).

Further, sanctions are appropriate where “a party’s contentions are not ‘warranted by existing

law’ or ‘lack evidentiary support.’” Colida v. Nokia, Inc., 347 Fed.Appx. 568, 571 (Fed. Cir.

2009) (unpublished) (citing FED. R. CIV. P. 11(b)) (finding sanctions appropriate for claims of

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design patent infringement that were objectively baseless, even under the more liberal standards

provided to pro se litigants). 2

Courts have recognized that asserting design patents against accused products that have

no realistic similarity to the design patents warrants sanctions. Id. (affirming Rule 11 sanctions

based on the assertion of design patent “infringement claims [that] were objectively baseless”

because “the dissimilarities far exceed the similarities when comparing each of plaintiff's four

[design] Patents” to the accused product, and the primary similarity was “functional, not

ornamental, and is therefore outside the patents' scope”); Cf. Colida v. Sharp Elecs. Corp., 125

Fed.Appx. 993, 996 (Fed.Cir. 2005) (unpublished) (finding pro se appeal of a design patent

claim frivolous where “the accused designs bear no realistic similarity to [the] design patents”

and the “differences between [the patents] and the [accused product] are so obvious and

pronounced that [Plaintiff’s] allegation

minded people.”).

is beyond the reasonable contemplation of fair-